On 28 October, the Delhi High Court held that a party unsuccessful in arbitration can seek interim protection under Section 9 of the Arbitration and Conciliation Act, 1996, after an adverse arbitral award, but must satisfy a higher threshold for such relief than at the pre-award stage.
Justice Tushar Rao Gedela granted interim protection to Thor Ventures (OPC) Private Limited, restraining NYEQ Technologies Private Limited from selling or creating third-party rights over two Gurugram properties pending the next hearing, despite an arbitral award rejecting Thor Ventures' claims. The Bench observed:
“That an unsuccessful party to the arbitration proceedings is entitled to invoke Section 9 of the Act, is unambiguous. That the onus of such an unsuccessful party to establish, prima facie, the ingredients of the triple test, is at a higher pedestal, in the post award situation than at the pre award scenario, is manifest.”
The dispute arose from two Agreements to Sell executed between Thor Ventures and NYEQ Technologies on 4 May 2019 for two Gurugram properties valued at Rs. 5.62 crore each, totalling Rs. 11.24 crore.
Thor Ventures paid an advance of Rs. 5 lakh for each property and obtained loan sanction letters from Pooja Finelease Limited on 7 July 2019 to finance the balance consideration.
After NYEQ Technologies refunded the Rs. 10 lakh advance, Thor Ventures invoked arbitration on 8 February 2021, alleging that NYEQ Technologies had failed to execute the sale deeds. NYEQ Technologies disputed the agreements, alleging forgery and lack of authorisation.
On 26 September 2026, the arbitrator upheld both agreements but rejected Thor Ventures' claims for specific performance and permanent injunction, finding that it had failed to establish financial readiness and willingness. The arbitrator treated the loan sanction letters as sham documents and awarded NYEQ Technologies Rs. 15 lakh in costs.
Subsequently, Thor Ventures approached the High Court under Section 9, seeking to preserve the properties pending its challenge to the arbitral awards under Section 34. It argued that the finding on the loan sanction letters lacked evidentiary support and that selling NYEQ Technologies' only two assets would defeat its challenge.
NYEQ Technologies countered that Thor Ventures had paid less than 1% of the consideration, failed to establish its financial capacity and could not seek reconsideration of the arbitrator's factual findings.
The Court found, prima facie, that the arbitrator's conclusion that the loan sanction letters were sham documents lacked evidentiary support. It noted that the lender's representative had supported the documents during cross-examination and had not been confronted with allegations of fabrication. It observed:
“That not having been done, this Court finds no evidence on basis whereof the conclusion was recorded in para 96 by the learned Arbitral Tribunal that the LSL is a sham document.”
Relying on the Supreme Court's ruling in Home Care Retail Marts Pvt. Ltd. v. Haresh N. Sanghavi, the Bench examined whether rare and compelling circumstances justified post-award protection.
Additionally, it considered the 2018 amendments to the Specific Relief Act, 1963, which strengthened the framework for enforcing contracts through specific performance, subject to statutory conditions.
It noted that the sale of NYEQ Technologies' only two assets could render Thor Ventures' Section 34 challenge ineffective, particularly because Thor Ventures had sought enforcement of the agreements rather than alternative monetary compensation. It held:
“Another compelling and rare circumstance appears to be that of the respondent having no other properties/assets other than the two subject properties which, if not preserved, may render the proceedings under Section 34 of the Act redundant and infructuous.”
Justice Gedela also found that Thor Ventures had established a strong prima facie case meeting the higher threshold for post-award protection. It also held that the balance of convenience favoured Thor Ventures and that the sale of the properties could cause irreparable injury.
Accordingly, the High Court restrained NYEQ Technologies from selling, transferring, encumbering or creating third-party rights over either property until the next hearing on 2 December 2026.
Appearances for petitioner (Thor Ventures): Senior Advocate Dayan Krishnan with Advocates Saurab Seth, Sukrit Seth, Thakur Ankit Singh, Liza Arora, Neelampreet Kaur and Kabir Dev.
Appearances for respondent (NYEQ Technologies): Advocates Sahil Sethi, Kanishk Kumar, Samriddh Bindal and Priyansh Kohli.